July-August - Air Defense Artillery

tages of all rights and privileges presently
available, such as conversion to a permanent
plan; freedom in the selection of
beneficiaries: and the choice of optional
settlements, particularly the option
which provides for the beneficiary liberal
monthly payments with a lifetime guarantee.
Even payment oyer a ten-year
period as provided for the free coverage
is available, but instead of the $92.90
monthly payments provided under the
indemnity, NSLI beneficiaries could receive
$96.10 a month and USGLI beneficiaries,
$93.30 a month. The first option,
to request waiver of premiums, offers
the definitely advantageous choice.
Recommendation. Those whose insurance
is presently on the term plan should
apply immediately to the Director of Insurance,
Veterans Administration, Washington
25, D. c., for waiver of their
premiums. V. A. forms are available at
each post. The local Finance Officer
should be consulted regarding cancellation
of the Class D (USGLI) or Class
N (NSLI) allotment, bearing in mind
that if the Total Disability Income Provision
is in force and is to be retained,
that portion of present premiums must
be continued.
PERMANENT Plans of Insurance
present more of a problem in decision.
The policy holders have the options 1)
to request waiver of premiums, 2) to
surrender the policy for its cash value,
and 3) to continue the policy in force.
It is well to point out here that the
USGLI and the NSLI policies are worth
.considerably more than indicated in their
face value. The USGLI policies are
based on an earning of 3lh per cent per
annum on your money, the NSLI policies
on 3 per cent; whereas the gratuitous
indemnity policy is based on an earning
of 2~ per cent. The disability provisions
in some of the USGLI and NSLI policies
can be obtained now only upon
proof of good health and at great expense.
The optional settlements offer real
advantages. For the widowed beneficiary
who desires a life annuity with 20 yea'r
guaranty (option 4 NSLI) the $10,000
policy is worth well over $12,000. For
.comparative purposes some of the
USGLI policies with the total disability
provision may properly be appraised at
around $14,000.
50
The insurance needs of the family are
also pertinent. The married officer with
young children is at that period of life
when his insurance needs are at the
maximum. If he has no other sound
investments or other means to supplement
the insurance protection, the Army
Mutual Aid Association considers that
he needs from $30,000 to $40,000 in insurance.
Ordinary life insurance provides the
greatest permanent protection for each
premium dollar; should the need arise
later, it can be used to provide the features
of an endowment or paid up policy.
Its sound features put it first on our recommended
list for most people.
WAIVER of Premiums will be
granted upon application to the Veterans
Administration as in the case of term
insurance, but this waiver will be effective
only on that portion of the premiums
representing the cost of the "pure insurance
risk," leaving the balance of the
premium payable. All dividends are forfeited
during the period of waiver.
Advantages:
~ Same plan ofinsuranceat reduced
rate since the government takes
over the "pure risk" portion of the
premium; savings may be applied
to additional insurance.
~ Retention of the good features of
NSLI or USGLI insurance including
the favorable rates, the
reserve, and the optional settlements.
~ Policy continues throughout active
service plus 120 days and
may be continued thereafter without
medical examination by resumption
of payment of the full
premium.
Disadvantages:
~ Generally, there are no disadvantages
in the waiver of premiums
on permanent plans of l'iSLI;
however, cash surrender may offer
even greater advantage.
~ Policvholders of USGLI with endo~ent
policies, or 20 pay life
ten vears old, or any that have
run for a long time ~ay find that
the amount of the premium to be
waived as "pure risk" may be offset
by the amount of dividend forfeited
if he applies for waiver.
The "pure risk" waiver rates have
not yet been published. However,
you can estimate your rate.
Take your policy and enter the
surrender value of your policy at
the end of the current insurance
year. (Policy shows this per
Sl,OOO.You enter for full policy.)
Divide this amount by 1.035.
From the quotient thus computed
subtract the surrender
value of your full policy at the
end of the preceding year. You
now have that part of the annual
increase in value which you have
to pay for by premium, or you
have the portion of premium applied
to accrued value. Subtract
that amount from the total annual
premium and you have approximately
the amount which
the V. A. will waiver. 1£ this
amount is less than your annual
dividend, then you lose by the
waiver. The annual dividends increase
with age of policy from
around $5.00 up to around $13.00
per $1000 per year.
Take the case of Colonel Ducrow who
in 1937 converted to USGLI ordinary
life policy, $10,000, at age of 43; annual
premium, $265.80; current dividend,
$62.30; surrender value end of 13th year,
$2509.30; end of 14th year, $2723.90.
$2723.90
Computation: 1.035 = $2631.80
Subtract 2509.30
$ 12250
Annual premium $265.80
Part to accrued value 12250
"Pure risk"-waiver part $143.30
Annual dividend 62.30
Col. Ducrow saves per year .. $ 81.00
If you have an endowment policy, a
twenty pay life ten years old, or old
ordinary life USGLI policy, you wiII
probably find that you lose.
Obviously, the waiver option does not
apply to paid up cases.
Recommendation. Analyze your own
USGLI policy accurately. If it shows
substantial savings, or if you have NSLI,
apply for the waiver unless you elect
to cash surrender. Consult your unit
insurance officer.
CASH Surrender. The permanent
plan policy holder may surrender his
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